The completion of the Beijing-Shanghai high-speed railway will be a key driving force of changes to the regional economic structure, especially in Beijing, Tianjin and Hebei Province. This was the opinion of Shen Yufang, a professor with the East China Normal University, as reported in the April 3 edition of Shanghai Securities News. Shen is also vice president of the National Economic Geographical Research Institute.

The high-speed railway is scheduled to be operational by 2010. Construction on the railway will start within this year and total investment in the project is estimated to be 130 billion yuan (US$16.24 billion).

Prof. Shen said that the railway will accelerate development in the surrounding central region and it will help reduce the economic gap between the region and south China's Yangtze River and Pearl River deltas.

Moreover, the philosophy and mode of economic development in the two deltas will effectively be introduced and applied to the region.

Beijing's gross domestic product (GDP) in 2005 was 681.45 billion yuan (US$85.12 billion); Tianjin recorded 366.39 billion yuan (US$45.73 billion), and Hebei 1.01 trillion yuan (US$126.29 billion). Experts said: "The Beijing-Tianjin-Hebei region isn't actually as economically developed as many might think, especially not a match to the two delta regions in south China."

Shen said the region's agricultural output is comparatively high and vestiges of the planned economy system continue to influence its markets. However, with the completion of the railway, Shen predicts a shift in the region's economic philosophy and mode of development. "The region's combination of a political center, a favorable coastal environment and heavy industry base means that the rate of growth in the region could exceed that of the Pearl River Delta."

Meanwhile, the railway will gradually create an environment that is conducive to investments by privately run enterprises from the Yangtze River Delta, where private capital is particularly active. For example, in Wenzhou of Zhejiang alone, circulating capital stands at about 300 billion yuan (US$37.44 billion). For the moment, this capital is tied up primarily in real estate and resource exploitation developments.

Clearing the bottleneck

The Ministry of Railways said the Beijing-Shanghai link will be for passenger use only. The existing line will be used mainly for freight transport.

The new railway will relieve some of the pressure of the current one. The existing system is overburdened with a passenger and freight density four times the national average. The new line will provide a better link for the resource-hungry Yangtze River Delta to Tianjin, and Hebei, Henan and Shandong provinces, the natural resources and industrial oil bases of northeast China.

In 2005, Shanghai, and Jiangsu and Zhejiang provinces recorded GDPs of 914.4 billion yuan (US$114.2 billion), 1.83 trillion yuan (US$228.06 billion) and 1.34 trillion yuan (US$166.81 billion) respectively, up 11.1 percent, 14.5 percent, and 12.4 percent respectively from the year before. In 2004, growth rates were 13.6 percent, 14.9 percent and 14.3 percent respectively.

The added-value of state-owned and private enterprises with annual sales of no less than 5 million yuan in these three areas in 2005 were 399.5 billion yuan (US$49.86 billion), 805.5 billion yuan (US$100.54 billion) and 490.5 billion yuan (US$61.22 billion) respectively, an increase of 12.5 percent, 22.5 percent and 18.1 percent respectively. Growth rates in 2004 were 19 percent, 23.4 percent and 21.1 percent respectively.

Economists attribute the economic slowdown in the Yangtze River Delta to the resources bottleneck. "The high-speed Beijing-Shanghai line will break the bottleneck," Shen said, adding that an economic revival can be expected.

In addition, a larger hinterland will be created as a result, which will create more space for development.

According to the ministry, 21 stations along the line have been planned through the three municipalities of Beijing, Tianjin and Shanghai, and the four provinces of Hebei, Shandong, Anhui and Jiangsu. It will cross two provincial capitals, namely Nanjing in Jiangsu and Jinan in Shandong. Eleven cities en route have populations of at least 1 million each.

(China.org.cn by Guo Xiaohong and Li Jingrong, April 7, 2006)